What do developers think of development in the Sunshine State?

"I think it's on fire," says Daniel Baumgard of Florida's current retail development scene. As Investment Management Associates' CEO and president of Baumgard Development Corporation, Baumgard should know. "The floodgates are open," he says. "Central Florida, east to west. Jacksonville. The whole state is pretty much rocking and rolling."

No need to tell that to Regency Centers, which currently has its hand in several Florida regions. "We have projects going on basically all over the state," says John Euart, Regency's managing director for the Southeast region. "One in the Panhandle, two in Tallahassee, one each in the Jacksonville area, Orlando, Delray Beach and Jupiter, and one just completed late last year in Naples." All are anchored by Publix. (Regency specializes in grocery-anchored neighborhood centers.)

Grocery-anchored centers -- especially those anchored by Lakeland, Florida-based Publix Supermarkets -- remain popular in the state, due to their relative stability. Inland Real Estate Acquisitions is developing three new Publix-anchored centers in Florida. "In grocery-anchored centers, we see a trend toward 60,000- to 80,000-square-foot centers with food stores occupying 35,000 to 48,000 square feet," says Steve Sanders, Inland's senior vice president.

Neighborhood centers are popular in Florida, but don't discount the big guys. Several new super-regional or lifestyle centers are presently under development throughout the state, including three mega-centers being developed by Turnberry Associates and Orlando's Mall at Millenia, developed by The Forbes Company and Taubman Centers, which is scheduled to open in October.

Regency's John Euart attributes the thriving retail growth to the state's favorable demographics. "Florida continues to have great demographic growth," he says. "So it will continue to be attractive to new developers. We're seeing activity all over the state. We feel like Orlando, for example, has just about recovered from the 9/11 catastrophe [and its negative impact on tourism]. And that has helped." Other hot spots, says Euart, are West Palm Beach and the Panhandle. "You can't drive anywhere without seeing cranes."

The North & Panhandle

Development fever is in the air along the Florida Panhandle.

"The Panhandle is like the Wild West," says Drew Barkett, director of real estate and retail development for Turnberry Associates. "It's amazing what's going on there. It's The Hamptons of Atlanta, of Birmingham. Let's face it: it has the nicest beaches in North America."

Capitalizing on that tourist pull -- and the booming affluence of the Panhandle's residents -- is what Turnberry Associates has in mind for its new Destin Commons lifestyle/regional center in the heart of Northwest Florida's Emerald Coast, the 100-mile stretch of beach extending from Pensacola to Panama City. The center will be open-air because, as Barkett puts it, "when you're on vacation, you want to enjoy the outdoors." Phase I of pedestrian-friendly Destin Commons, slated to open mid-2003, will be 400,000 square feet of retail space anchored by Bass Pro Shops, Belk Resort Store and a 15-screen Marquee Cinema. Reflecting a "resort-style town square" setting, the site will offer pop fountains, performance stages and, oh yes, shopping. Once all phases are complete in 2004, Destin Commons will boast 660,000 square feet of retail space.

Turnberry Associates is thrilled to have the highly-coveted Bass Pro Shops onboard. "[Bass Pro Shops] in itself is a unique experience. People drive from all over to go to these stores," Barkett says. Its new Destin Commons store marks only the 16th Bass Pro Shops location in the country.

Also under development by Turnberry Associates is an open-air super-regional center in Davie. Davie Commons, opening in 2005, takes the new lifestyle concept one step further, says Barkett, by having residential and hotel components, 600,000 square feet of office space and over 1 million square feet of retail space. Currently Davie Commons is courting higher-end tenants like Nordstrom.

Jacksonville-based St. Joe Commercial and Orlando-based Quality Centers have pre-leased more than 90,000 of the available 190,000 square feet of retail space at Pier Park's new outlet facility in Panama City Beach, developed in partnership with the City of Panama City Beach. Phase I of Pier Park -- expected to cost as much as $70 million -- is targeted to open next year. Eventually Pier Park will also include 6 acres of prime beachfront facilities, along with 50 acres of adjacent retail, dining, entertainment, hotel and timeshare facilities and 70 acres of highway-oriented commercial facilities.

Regency Centers has broken ground on a 62,821-square-foot Publix-anchored shopping center at the intersection of U.S. 90 East (Mahan Drive) and Vineland Drive in Tallahassee. This is Regency's fourth property in Tallahassee, totaling 329,676 square feet of retail development in the community. The company plans to continue investing in the Tallahassee market. Regency has also developed a 63,870-square-foot Publix-anchored center in Lynn Haven, north of Panama City. That project is expected to open in August.

RMC Property Group is taking the redevelopment route. RMC is acquiring several older, mostly-vacant centers and redeveloping them, including one in Orange Park and one in Gainesville. The Orange Park center, called Kingsley Square, once housed Publix and Eckerd. Currently RMC is negotiating leases for two new anchor tenants at the 114,000-square-foot center. COO Michael Leeds says he sees significant opportunity to redevelop shopping centers in Florida. "We have completed a number of these projects and are working on several more. Older, more established areas where relocation is not an option because of the scarcity of land makes redeveloping these 30- to 40-year-old centers the way to go," he says. He says retailers and developers like these older centers because they are generally in excellent, well-established, dense locations.

Orlando & Central Florida

According to Trammell Crow's Central Florida Retail Market Review of 2001 and Forecast for 2002, last year was a stable year for both leasing and sales, despite the September 11 attacks. The beginning of 2002 mimicked that stability. Rental and occupancy rates remained flat and investment sales were on pace to match previous years, according to the report.

Led by The Mall at Millenia, scheduled to open October 18, the Orlando retail market remains the hottest hot spot in Central Florida. Trammell Crow also expects the mall to have a "profound impact" on the area. "We expect it to capture 100 percent of the high-end southwest retail market and portions of the tourist and convention business," says Trammell Crow in its leasing forecast. Taubman Centers and The Forbes Company are developing the 1.2 million-square-foot Mall at Millenia, which is part of a 405-acre mixed-use development. The mall will be anchored by Neiman Marcus, Bloomingdale's and Macy's. The surrounding Millenia development (a joint venture of Schrimshers, John Rife, Jones Lang LaSalle Development and DLJ Opportunity Partners) will contain 2 million square feet of Class A office space, three hotels and two power centers with more than 500,000 square feet of retail.

In the tourist corridor opposite Universal Studios, Phase II of Festival Bay, developed by Memphis, Tenn.-based Belz Enterprises, will open in April 2003. Located on International Drive, the 1.1 million-square-foot center will feature a 20-acre amusement park. Belz also developed and manages Belz Factory Outlet Worlds in Orlando and St. Augustine, in addition to a Belz Designer Outlet Centre in Orlando, which houses more than 200 name brand outlets, including Calvin Klein, Birkenstock, Polo Ralph Lauren and Jones New York.

Just south of Longwood, Development Design Group, The Staubach Company and The McGarey Group are designing, developing and leasing, respectively, retail space at the $150 million Altamonte Town Center in Altamonte Springs' central business district. The site will include retail and restaurant establishments as well as a new 75,000-square-foot, 3,800-seat multiplex theater, to be built by Mega-Star Cinemas. The development will also have hotel, office and residential components.

Sixty miles southeast of Orlando, Houston-based Weingarten Realty has acquired a supermarket-anchored center in Melbourne. The center was purchased from Melbourne-based Lake Washington Square Ltd., and CB Richard Ellis represented Weingarten in the transaction. Tenants for the 112,000-square-foot center, currently 98 percent leased, include Tuesday Morning, TCBY and Sally Beauty Supply. This acquisition marks Weingarten's 10th property in Florida, aggregating 2.7 million square feet.

Southwest of Orlando, in Winter Haven, RMC Property Group is redeveloping Northgate Shopping Center. RMC demolished the old Publix Supermarket and constructed a new 44,000-square-foot Publix in its place. The project should be completed by this month. RMC is also constructing several new Walgreens stores, including one in Brandon, between Winter Haven and Tampa. Plans are in the works for Walgreens in Fort Myers and Orange Park as well.

Tampa Bay

According to Marcus & Millichap's 2002 National Retail Report, Tampa's retail market has been in a transition stage during the past year, as demand for new upscale shopping centers has been quenched. Retail property prices have remained affordable when compared to the national average, says Marcus & Millichap, but strong demographics are beginning to generate more investor interest in local properties. Rents at new centers are well above market rates, but the overall market rents have experienced only moderate growth. Retailers such as FAO Schwarz and Dillard's have closed stores in the area; others have fled older centers for newer properties, which has put a strain on submarkets like South Hillsborough, which experienced an exodus of mall tenants to other new malls as well as store closures. Short-term effects on rent prices have been dramatic, according to the report, but in the long term rent demand is expected to remain high. Marcus & Millichap predicts rents will rebound by the end of the year.

New Plan Excel Realty Trust and The Sembler Company have teamed up to redevelop a premier property in the Tampa Bay region. The Clearwater Mall Redevelopment is located on the site of the existing Clearwater Mall, at the southeast corner of U.S. 19 and State Road 60. It will provide access to and from all areas of the Tampa Bay trade area. With a projected 2003 opening, the new Clearwater Mall will offer 795,403 square feet of retail space.

The Sembler Company also plans to open two new centers in St. Petersburg in 2003. The 384,671-square-foot Crossroads Shopping Center, located opposite Tyrone Square Mall, is being redeveloped to allow for a new Home Depot, several outparcels and a new anchor tenant up to 44,424 square feet. Also being developed by Sembler, University Village will be a 46,000-square-foot Publix-anchored center located in the central business district of downtown St. Petersburg. The center will be located at a key intersection within an area undergoing intense residential and commercial redevelopment.

Southwest Florida

In the southwestern part of the state, Bonita Springs-based Pelican Bay Development has broken ground on Sanibel Beach Place, a mixed-use project in Fort Myers. Situated along Summerlin Road near the Sanibel Island Causeway, the center will offer 100,000 square feet of shopping, including a 45,000-square-foot Publix, 35,000 square feet of specialty shops and restaurants and four outparcels. Future phases include hotel and office components. Sanibel Beach Place will open in second quarter 2003. Pelican Bay, along with West Hartford, Conn.-based DEVCON Enterprises, has also announced the grand opening of Bonita Grande Crossings, a 90,676-square-foot shopping center located just off I-75 in Bonita Springs. The 15-acre retail center is anchored by Publix Supermarket. Doron Valero, president of Equity One, attributes the boom in Southwest Florida to population growth and quality of life.

Also in Bonita Springs, Simon Property Group is developing a mixed-use project that will feature 1 million square feet of retail space, 300,000 square feet of office space, 1,200 residential units and a 600-room hotel. Five anchors are expected. The center is scheduled for completion in 2004.

Regency Centers has sold an outparcel to McDonald's Corp. in the 78,784-square-foot Grande Oaks Shopping Center, now open in Fort Myers. The center is anchored by Publix Supermarket; other tenants include Subway, Great Clips and Nail Jazz.

Sarasota-based Casto Southeast plans to develop more entertainment/ lifestyle-themed projects to follow up on its successful Winter Park Village development, which consists of 350,000 square feet of retail space, 115,000 square feet of office space and 60,000 square feet of residential space. Brett Hutchens, president of Casto Southeast, feels optimistic about retail development in Florida. "Winter Park taught us a lot about the advantages of mixed-use projects," he says. "The challenge is to preserve the traditional shopping experience and, at the same time, offer the consumer something new and different." Casto Southeast currently owns and manages over 1.3 million square feet of retail space in seven Florida shopping centers. Other recent project completions include Pine Island Crossing in Cape Coral, Seminole Lakes Plaza in Punta Gorda and Clermont Crossing in Clermont. A new grocery-anchored project (as yet unnamed) is being planned for a fall 2003 opening in downtown Sarasota.

Southeast Florida

According to Marcus & Millichap's 2002 National Retail Report, the Fort Lauderdale-West Palm Beach area -- a staple of Southeast Florida's retail scene -- continues to grow in population, which results in the growth of solid spending power. Retail completions have plummeted, however. Only 1.7 million square feet of retail space is forecast to enter the market in 2002, according to Marcus & Millichap's report. But the highest-growth submarkets, such as Southwest Palm Beach and Coral Springs, continue to attract retailers to the area. Asking rents in Fort Lauderdale-West Palm Beach are expected to climb to $16.51 per square foot, triple-net, which is a moderate increase compared to recent years. Marcus & Millichap predicts that the impressive demographics of the region will allow owners to raise rents more rapidly in 2003 and 2004.

Located 10 to 12 miles north of West Palm Beach at the intersection of Interstate 95 and Indiantown Road, Developers Diversified Realty is developing The Shoppes at Jupiter Falls, a 530,000-square-foot open-air center designed to capture a large unclaimed market to the north in Martin County, as well as much of northern Palm Beach County. Tenants will fall into several categories: discount department stores, home furnishings, home improvement, specialty retail, apparel stores and restaurants. The center's grand opening is projected for 2004.

RMC Property Group is redeveloping the Publix at Spanish River in Boca Raton, after having constructed a new Publix Supermarket on the site. "The balance of the [Spanish River] center is to be redeveloped," says RMC COO Michael Leeds. "The new Publix opened earlier this spring, and the balance of the center will be renovated by the end of the year."

Equity One is also active in Florida, particularly in the southeastern sections, including the Miami-Dade County area, St. Lucie West and Pembroke Pines. Plaza Allegre will be an 84,000-square-foot center anchored by a 34,000-square-foot Publix in Miami-Dade County. "We expect the project will be completed by March 2003," says Doron Valero, president of Equity One. "We are also in the permitting process for a drugstore-anchored shopping center on Coral Way in Miami." That center is expected to open December 2003. At Cashmere shopping center in St. Lucie West, Equity One has constructed an additional 20,000 square feet of retail space adjacent to its Albertson's-anchored shopping center. Construction is slated to begin this December and scheduled for completion in May 2003. At University Plaza in Pembroke Pines, Equity One will begin a $10 million redevelopment of the 340,000-square-foot center in September. Valero says 90,000 square feet of retail space will be developed, including a freestanding Eckerd Drug Store and Goodyear Tires. Completion is scheduled for October 2003.

Valero says it has become increasingly difficult -- and expensive -- to secure permitting for new projects, particularly in the western parts of Miami-Dade, Broward and Palm Beach counties. "As land in certain areas, such as Miami-Dade County, becomes more scarce, construction costs are increasing and redevelopment is more viable," he says. "Right now we're seeing continued development of retail centers with secure anchor tenants as opposed to speculative development. But, we are not seeing overbuilding."

Inland Real Estate has 27 retail properties in Florida, including three in the southeastern section of the state: a 145,545-square-foot center in Deerfield Beach called Hillsboro Square; a 76,371-square-foot center in New Port Richey called The Shoppes at Golden Acres; and, near Fort Lauderdale, a 232,259-square-foot center in Tamarac called Midway Plaza. All are being redeveloped as Publix-anchored centers. Hillsboro Square's old Publix anchor was razed to make way for a new Publix scheduled to open in September. Other tenants include Eckerd Drugs, Sun Bank and Starbucks.

Inland entered into an agreement with AG Armstrong Development to construct The Shoppes at Golden Acres. The center is expected to be completed late this year. Midway Plaza's tenants include Publix, Ross Dress For Less, Blockbuster and Boston Market. "Once the center is renovated and vacancies are filled, [we'll] have an attractive center in an excellent location in the heart of Broward County," says Steve Sanders, senior vice president of Inland.

Between Deerfield Beach and Fort Lauderdale, Faison is redeveloping a 900,000-square-foot enclosed mall called Pompano Citi Centre in Pompano Beach. Upon completion of all phases in 2005, Pompano Citi Centre will be a 1 million-square-foot power mall combining the mall's anchor tenants and big box retailers for one-stop shopping. Tenants include Burdines, JC Penney, Sears, Ross Dress For Less, LensCrafters, Champs Sports, Hallmark, Subway, RadioShack and GNC.

South of Fort Lauderdale, the Miami retail market continues to flourish, despite slowed job and population growth compared to the rest of the state. Offsetting these issues, though, is the improvement in local travel and tourism industries -- a sign that spending will be on the rise -- which should allow the Miami retail market to remain stable throughout 2002. According to Marcus & Millichap's 2002 retail report, redevelopment interest remains high due to the diversity of the Miami market.

Investment Management Associates is currently in the permitting stages for the development of two neighborhood centers, one on the Miami-Dade/ Broward County line in Miramar and another in Florida City. The first, to be called Miramar Crossings, will be a mixed-use facility offering 25,000 square feet of retail space and 3 outparcels, plus 40,000 square feet of office space. The second, Gateway Shoppes, will be situated on South Dixie Highway at the entrance to the Florida Keys. IMA CEO Daniel Baumgard envisions Gateway Shoppes as a stop-off point on the way to the Keys. "It's in the middle of all these hotels; it's like fast-food heaven." What more could tourists passing through ask for?

Neighborhood centers saw little impact from the recession, according to John Joyce, vice president for retail development in Florida for Aronov Realty. Joyce says that while large super-regionals and lifestyle centers depend on a large market radius, neighborhood centers offer a lot more development opportunity.

St. Joe Commercial President Frank Herring Jr., foresees increased retail development throughout the state in 2002 and 2003. Wal-Mart and Target stores are among the most active in the state, he says, as are grocery- and drugstore-anchored centers. Due to apparel industry woes, he says, the development of lifestyle centers has declined somewhat. But, he says, "people are still moving into the state [and] Florida is affected more by population growth than the economic cycle." St. Joe Commercial is the asset management and development division of Jacksonville-based St. Joe Company.

Turnberry Associates will join developer Ed Gadinsky on another project, this time in South Florida. Aventura Crossings will be a 220,000-square-foot power center located just west of Biscayne Boulevard in Aventura, directly opposite the 2.3 million-square-foot Aventura Mall, whose tenants include Bloomingdale's, Macy's, Burdines and Lord & Taylor. "Being right across from [Aventura Mall] is virtually a no-brainer," Barkett says of the center's enviable location. Construction is scheduled to begin in 2003 with occupancy scheduled for 2004. The center already has a tenant commitment from Linens N' Things.

Regency Centers is developing a 113,841-square-foot shopping center in Delray Beach. The Shops at San Marco center will be anchored by a 44,271-square-foot Publix Supermarket, plus four outparcels. Walgreens has signed on as one of the outparcels and should open in October. Publix is expected to open in March 2003.


©2002 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.